Every once in a while you may unexpectedly meet someone who is filled to the brim with knowledge and information. Who knew that simply striking up a casual conversation with a stranger next to you could be so valuable!

That happened to me recently, I was struggling to get my over-packed suitcase into the overhead storage on a plane when I met the founder of an angel investing network. Angel investors are people who invest money in businesses to help them get started. Think Dragons Den or Shark Tank without all the hype.

Long story short, we chatted throughout the flight about entrepreneurship, investing in companies, winners, and losers and then I asked him this…

“What would you say are the most common characteristics or attributes that you’ve seen as an angel investor that cause companies to fail?”

Here are the five he gave me: (Spoiler alert… they’re all tied to the leader of the business)

They think they know everything

They start to believe their ideas are as good as their friends and family tell them

Their vision isn’t big enough

They don’t listen

They don’t understand the value of their leadership and communication skills

Let’s unpack this a bit.

They think they know everything

Have you ever found yourself in a situation where you thought you knew everything about your company? Maybe you’ve used the words “Yeah but my business is different?” Those words typically indicate you have a closed mind and believe that you know more than anyone else about your industry.

When you found a business, the business and its ideas are closely tied to your identity and ego. Admitting you don’t know everything can be a source of growth while many fear this admission is a sign of failure.

They start to believe their ideas are as good as their friends and family tell them

Have you ever shared ideas with friends and family and they told you that they were amazing? Are your friends and family members experts in starting a business? Are they your potential buyer? When you drink the kool-aide that your family feeds you, you run the risk of acting and investing on a business idea that there is no market for. Do you like telling people you love that their ideas suck? I didn’t think so.

Your family doesn’t want to tell you either. If you’re looking for honest advice, you need to get it from someone who isn’t concerned with hurting your feelings and has some level of insight on what it takes to run a successful business.

Their vision isn’t big enough

What about your vision? Do you ever find yourself thinking about “for now” instead of what you really want for the future? “For now” thinking is small thinking. Having a growth mindset is important. It’s scarcity mindset and it demonstrates a lack of true visionary leadership. If you’re already minimizing your business’s full potential, you’re in trouble. As the leader, you’ve got to be the one who holds the space for the long term and if you are afraid to do that, your business is doomed to fail.

I often hear people who want to make enough to “get by.” This is thinking small too. You don’t start a business to trade four quarters for a dollar, you start it to turn a profit and get paid for your efforts.

They don’t listen

Have you ever asked someone for advice and then spent the next ten minutes telling him or her why what they suggested won’t work? This is a classic example of thinking you know everything and not listening to advice.

You cannot know everything. As a leader of your company, it’s your responsibility to seek out the best ideas and to act on them. That means listening without rationalization. You can listen to and consider the advice and choose not to act on it but if you don’t listen and consider, you’re missing opportunities.

The moment you find yourself defending why you do things the way you do, you’re not listening. Try being curious and asking more questions to understand instead of being so resistant that you miss the opportunity to gain a life changing nugget of wisdom from someone else.

You can’t change your situation by doing the same thing. What got you to where you are right now isn’t going to take you to the next level or else you’d already be there. You’ve got to change – and change requires setting your ego aside and really figuring out what your next best move is.

They don’t understand the value of their leadership and communication skills

You may have the best product/service idea out there but if you lack the interpersonal skills required to be a good leader, you’re dead in the water. Ideas and great marketing strategies will only take you so far. To build something amazing you need to surround yourself with smart people and you’ve got to be able to lead, inspire and communicate effectively.

Many business owners I work with don’t see themselves as leaders. They see themselves as the owner of their business and that gets in the way of really leading the company.

If you want to build a business, versus create a job for yourself, you’ve got to master the art of leading and inspiring others. Great things happen because leaders innovate, communicate, take risks, and can rally a movement. It doesn’t matter if you’re selling cupcakes, social media services, or mixed media art courses, your leadership skills are what attract or repel people from your business.

Pay attention to how people respond to you. Read and learn about leadership, how to influence and inspire and build solid relationships. Your role as a leader is the single most important part of running your company. If you fail at this, even if you excel at everything else, your company won’t be as successful as it could be.

My final piece of advice, next time you are in casual conversation with a stranger, find out what they do.

Spend more time asking questions and listening instead of talking about yourself and you just might be amazed at what you take away from the conversation.

As a business owner, what one of these 5 things do you pride yourself on being REALLY good at? Are you good at separating yourself from emotion and in return can take advice? Do you understand the value of communication and pride yourself as a great leader? Let me know below!

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